Private label housewares program in the offing? - at Sears

Discount Store News, March 20, 1989 by Mary Ellen Kelly

Private Label Housewares Program in the Offing?

CHICAGO -- Sears executives admitted clouds of uncertainty obscure the view of its future housewares department. But industry sources are shedding some light on its features including an extensive private label program.

The strategy Sears is employing in its other departments--everyday low pricing on national name brand merchandise--will probably be a component of the housewares approach as well.

But there also has been speculation that the new Sears' housewares department might incorporate ideas borrowed by from the nation's second largest retailer, K mart.

Industry sources say Sears is considering the creation of an integrated home decor presentation--in hard lines--similar to K mart's Martha Stewart program.

Merchandise like decorative accessories for the kitchen, giftware and possibly tabletop items are among those being considered for a proposed integrated private label program. A floral Victorian motif is the design theme being investigated for this private label program, according to several industry sources.

One vendor who said his company is part of the private label program said the roughly 12-sku offering his company is producing for Sears might be on store shelves in time for 1989 fourth quarter sales.

Each of these items--decorative accessories, giftware and tabletop--lends itself to private label for several reasons. These products have relatively low brand recognition compared to most housewares products (except among high-end selections). If a hot-selling color and design is established, Sears could command an attractive gross margin due to the unavailability of identical product at competing retailers.

Coordinated color and styling across these three product groups also stimulates add-on sales. Few manufacturers, other than the high-end vendors, offer integrated product across decorative accessories, giftware and tabletop.

Product areas with high brand recognition like kitchen electrics and cookware are expected to receive the national brand emphasis Sears is using storewide. Kenmore seems well-positioned as the dominant name in housewares electrics and as a lower-price alternative to brands like Black & Decker (in irons, for example) and Toastmaster.

Early indications are that national brands could be used as a foil for the Kenmore label. The nationally recognized brands can draw customers into stores but the Kenmore name, price and three-year warranty might win the majority of sales.

Despite the retailer's well-publicized difficulties, consumers have maintained a loyalty to Sears' electric housewares and the Kenmore name. Taking advantage of this consumer faith might be Sears' trump card in the housewares department.